CHICAGO — I’m sure you chart the course of your self-service laundry business month by month, but wouldn’t you like to know how your store measures up to others in the industry? Did you have a “good” year or a “bad” year in 2017, comparatively speaking? Is your pricing strategy in line with others?
The answers to questions like these and more can be found in American Coin-Op’s annual State of the Industry survey, which offers store owners and operators a valuable opportunity to compare their operation to others in the industry.
This year’s survey focused on 2017-18 business conditions, pricing, equipment, common challenges, turns per day, and utilities cost.
When asked about their 2017 business results, respondents were given the opportunity to state whether their results were up, down or unchanged. This is a departure from surveys compiled in 2011 and earlier, when respondents were asked only if their business was up or down. Keep this in mind as you’re making comparisons to previous years’ results.
The survey was an unscientific, online poll of American Coin-Op readers who operate stores. Some percentages may not equal 100% due to rounding or other factors.
AUDIENCE BREAKDOWN
Before getting into the dollars and cents, let’s examine the characteristics of those polled and their operations.
Roughly 54% of respondents own just one self-service laundry, while 45.9% are multi-store owners (30.6% of total respondents own two or three stores, 15.3% own four or more stores).
Approximately 47% of respondents own their store space, 40.3% rent their store space, and the remaining 12.5% say the arrangement varies by property.
Fully attended stores among the audience account for 30.6%. Roughly 31% are partially attended, and 26.4% are unattended. Among the remaining 12.5%, the arrangement varies by store.
More than 83% of laundry owners employ either full- or part-time workers in their stores. Roughly 58% of those respondents have four or more employees, while 21.7% employ two or three. The remaining 20% have only one employee.
On average, responding store owners have 1.7 full-time employees and 4.3 part-time employees (this calculation reflects averages by respondent, not by store).
Roughly 65% of respondents operate coin-only stores, 6.9% operate card-only stores, and 27.8% offer both, according to the survey results. The shares of card-only stores and so-called “hybrid” stores both increased from last year’s survey.
2017 BUSINESS VS. 2016
For 2017, 77.5% of operators say their overall vended laundry business increased from that of 2016. Specifically, these operators reported an increase in business (gross dollar volume) last year compared to 2016.
In our 2016-2017 survey, 61.1% reported an increase, while 71.4% reported seeing sales growth in the survey prior.
The average 2017 business increase was 9.4%, down from 11.2% in 2016. Other past average business increases were 9.6% (2015), 8.9% (2014), 9.6% (2013), 11.7% (2012), 11.5% (2011), 10.8% (2010), 7.9% (2009) and 14% (2008).
Following is a breakdown of 2017 business increases (the figures relate to those reporting increases, not all respondents):
- Operators with a business increase of less than 10%: 51.0%
- Operators with a business increase of 10-14%: 29.1%
- Operators with a business increase of 15% or more: 20.0%
Just shy of 10% of operators faced a decrease in business (in gross dollar volume) in 2017, down from 22% in 2016. The percentage was 17% in 2015, 29% in 2014, 25% in 2013, 30% in 2012, 35% in 2011, 58% in 2010 and 59.8% in 2009.
The average business decrease in 2017 was 6.7%, down slightly from the 9.1% decline reported for 2016. Prior average decreases were 16.3% in 2015, 6.6% in 2014, 8.7% in 2013, 9.5% in 2012, 10.2% in 2011, 11.2% in 2010, 13.7% in 2009 and 14.3% in 2008.
Here’s a closer look at 2017 business decreases (again, the figures relate to those reporting decreases, not to all respondents):
- Operators with a reduction of less than 10%: 66.7%
- Operators with a reduction of 10-14%: 33.3%
- Operators with a reduction of 15% or more: 0%
About 13% of respondents say 2017 business was unchanged compared to 2016 business.
Based on these figures, the self-service laundry industry remains strong, on average. While the average business increase was down by a couple of percentage points, the share of store owners who enjoyed a better gross dollar volume than the prior year was more than 16 percentage points higher.
And the share of responding operators who saw 2017 business decline was 12 points less than 2016’s accounting, plus the average business decrease in 2017 of 6.7% was less than the 9.1% reported for 2016.
DROP-OFF DIRECTION
Drop-off service—taking advantage of society’s desire for convenience—ticked upward again in 2017. Roughly 68% of operators reported that drop-off service business (in gross dollar volume) increased for them in 2017, compared to 61% in 2016, 52% in 2015 and 18% in 2014.
The average increase in drop-off service business last year was 26.1%, up from 2016’s 18%, 2015’s 13.7% and 2014’s 12.3%.
Roughly 16% of respondents saw a decrease in drop-off business, which is about 10 percentage points more than 2016’s 6.5%. The percentage was 15% in 2015 and 27% in 2014.
The average decline in drop-off service business in 2017 was 7.8%, compared to 15% in 2016 and 16% in 2015. Previous average declines were 11.3% in 2014, 9.0% in 2013, 18.1% in 2012 and again in 2011, 18.8% in 2010, and 24.2% in 2009.
Roughly 16% of respondents say their 2017 drop-off business was unchanged from the previous year. That’s compared to 35% for 2016, 36% for 2015 and approximately 55% for 2014.
DROP-OFF PRICING
Current drop-off pricing (in dollars per pound) ranges from 75 cents to $2.45, based on the survey responses.
Following is a breakdown of the most popular drop-off service prices (per pound), followed by the percentage of operators who use them:
1. $1.25 (25.6%)
2. $1 (20.5%)
3. $1.50 (7.7%)
Overall prices for drop-off service remain consistent with previous years’ figures. In total, 14 different drop-off prices were reported in this year’s survey (which matches last year’s poll).
Roughly 54% of operators who took the annual survey offer drop-off service, compared to the 55% who responded to last year’s poll.
COMMERCIAL VENTURES
Among store owners who offer commercial laundry services, 41.9% reported that business (in gross dollar volume) increased for them in 2017. The average increase was 22.7%.
About 10% of respondents saw a decrease in this category. The average drop in business was 6.0%.
Roughly 55% of respondents say their 2017 commercial laundry business was unchanged from the previous year.
VENDING VIABILITY
Vending sales business (in gross dollar volume) for 2017 ticked upward when compared to 2016 reporting. Roughly 60% of respondents reported their sales increased in 2017, a sizable increase from the 38% of respondents in this group for 2016. Approximately 12% reported a decline in vending sales, compared to 19% for 2016. Operators reporting no change in vending sales for 2017 accounted for 28.1%, compared to 44.8% in the prior year’s survey.
The average vending sales increase was 12.7%, up slightly from 2016 (11.9%). The average decrease in 2017 was 12.3%, compared to 10.3% reported for 2016.
Coming in Part 2 Thursday: Trends in wash/dry pricing
Have a question or comment? E-mail our editor Bruce Beggs at [email protected].